Will ICT make Kenya Africa’s Silicon Valley?

Kenya is on the brink of becoming Africa’s ICT hub due to the continued growth in Internet and mobile technology use in East Africa’s biggest economy with investors flooding the country.

The recent Kenya Economic Update report by the World Bank states that over the last decade, ICT has outperformed all others sectors in Kenya, growing at an average of 20 per cent annually.

“The benefits of ICT are starting to be felt in other sectors, and have contributed to the conditions for the country to reach an economic tipping point,” the report says.

The report reveals that Kenya has opened 2011 with renewed and stronger than expected growth on the back of a new constitution, strong macro-economic policies, and a favourable regional environment.

Over the past three decades, Kenya has experienced only two short periods of economic growth that exceeded five per cent and was sustained for at least three consecutive years: 1986-88 and 2004-2007.

This has raised the question: Is Kenya on the verge of experiencing another growth spurt? Will it last longer and go deeper than the previous two episodes?

The World Bank researchers envision that this could indeed be the case, as the uptake of ICT throughout the economy could provide the impetus required for high and sustained growth.

Today, Kenya has the largest mobile money platform in the world. An estimated 15 million mobile phone users were using mobile money by the end of 2010, the equivalent of three out of every four adult Kenyans.

In East Africa, Internet access in recent years has recorded a significant growth.

The World Bank estimates that in 2004, there were 1.65 million active Internet users in the region.

By 2007, the number had increased to 4.78 million, and by 2010 the number of regular users had jumped to 6.78 million, a penetration rate of about 5.1 per cent of the population.

The introduction of data enabled smartphones, which allow internet access through mobile phones has boosted this area hugely.

Kenya’s active Internet usage stands at 8.7 per cent of the population, the highest in the region, compared with Uganda (7.9 per cent), Rwanda (3.1 per cent), Tanzania (1.2 per cent) and Burundi (0.8 per cent).

Paul Odhiambo, CEO of a Nairobi-based ICT consultancy firm, says that creating demand for locally developed software will provide a much needed stimulus for growth of the sector.

“If the government passed similar policy as was passed regarding local content on television—that a certain percentage of ICT solutions in government institutions must be home grown—this will go a long way in developing our local ICT talent.”